Compulsory super steps up

The amount of super that employees receive from their employers is set to rise from July – boosting the retirement savings of millions of Australians.

With all the Government’s tinkering with the super system over the last few years, you could be forgiven for being a bit numb to the latest changes.

But there’s one change that kicks in on 1 July 2013 that’s definitely worth paying attention to: the increase in the Superannuation Guarantee.  


What’s the Superannuation Guarantee?

The Super Guarantee (SG) is the amount your employer must contribute to your super account on your behalf.

Your employer is legally required to contribute the equivalent of 9% of your salary up to a ‘maximum contribution base’, which is currently $45,750 per quarter ($183,000 a year). Employers don’t have to pay contributions for earnings above this limit.


What’s changing?

From 1 July 2013 the SG will start a gradual climb from 9% to 12% by 2019-20, as shown below.


SG rate


















What difference will it make?*

  • A 30-year-old earning $50,000 a year now will have an extra $165,000 at age 65.
  • A 40-year-old earning $75,000 a year now will have an extra $108,000 at age 65.
  • A 55-year-old earning $95,000 a year now will have an extra $20,000 at age 65.


The Government expects 8.4 million people to benefit from this measure. For those in their 30s and 40s, this kind of extra money could provide a major lifestyle boost when they eventually stop working.


Why the change?

These increases are a response to the fact that people are living longer and spending longer in retirement. They also help address the widespread concern that 9% super contributions won’t be enough to give the majority of Australians an adequate lifestyle after they stop working.

According to Suncorp’s Super Attitudes Survey 2012, more than half (53%) of Australian super fund members worry about whether they will have enough super to retire on.

Not surprisingly, almost two-thirds (64%) said they would support an increase in SG contributions.


How else can you grow your super?

Of course, you don’t have to rely on SG contributions alone to grow your super. There are a number of ways you can take control and boost your savings. For starters, try the following:



Additional retirement savings are expressed in future dollars. Gross investment return is 6.5%. Earnings are calculated at the end of the year. Contributions are made at the beginning of the year. There is no salary sacrifice, no one-off non-concessional contributions, no consolidation of lost super and no career break.

Important information

This information is current as at 1 March 2013 and may be subject to change. It has been prepared without taking into account a person’s objectives, financial situation or needs. For that reason, before acting on this information, a person should consider its appropriateness having regard to their own objectives, financial situation and needs. Where the information relates to the acquisition, or possible acquisition, of a particular product, a person should read and consider the relevant Product Disclosure Statement (PDS) in deciding whether to acquire, or continue to hold, the products.

The products referred to are issued by Suncorp Portfolio Services Limited ABN 61 063 427 958 AFSL 237905 RSE licence number L0002059. Various products and services are provided by different entities of the Suncorp Group. The different entities of the Suncorp Group are not responsible for, or liable in respect of products or services provided by other entities of the Suncorp Group.

Tags: Super